Share price hammered amid two unpleasant surprises in the1H15 results. First, andperhaps the more significant of the two is the scrapping of the interim dividend payment,which has shocked the market and in our view is the key reason behind the sharp fall inshare price yesterday (down c12%). The second surprise was more related to earnings asSOHO’s 1H15 core profit of RMB72m was down 94% y-o-y, and represented the lowestlevel since 2010, but we argue that this should be within expectation amid the businesstransition. In our view, investors can look beyond what we consider as “technical” changein dividend policy, as SOHO indicated it is committed to paying a generous full yeardividend in its results briefing. Should one be expecting resumption of dividend payment? We believe the answer isyes, and our judgement on this is based on two key reasons: (1) recent amendment ofbond covenants has enhanced SOHO’s flexibility in its financial management.Specifically, we understand that there was no debt-related restrictive covenant that shouldhave gotten in the way of SOHO making an interim dividend, and (2) SOHO hassufficient offshore cash balance of about cRMB2bn to cover a potential payout.Changes in estimates are significant, but mainly reflect the changes in plan to lease outfloor space previously slatted for sales. As such, we are cutting our FY15e and FY16eEPS by 55% and 6%, respectively, to reflect phased out property sales revenue, partiallyoffset by higher rental income. We tweak our NAV estimate by 1% to HKD14.0. Reiterate Buy with a new TP of HKD7.00 (versus HKD8.50). The change in TP is mainlydriven by the widened target discount of 50% (0.5 SD below mean) compared with theoriginal 40% (historical mean) applied to our revised NAV estimate. Note that the widenedtarget discount is more a reflection of dampened sentiment on the stock, rather thanfundamental operational issues. Despite a deeper target discount applied, our new TP-impliesan upside of 78%, which is on the high end of our coverage universe. Key downside risksinclude slower-than-expected lease-up progress, worse-than-expected dividend payout anduncertainties related to macroeconomic and property-specific policies in China.